Report: IRS Software Management Practices Don't Meet Government Requirements

The IRS isn't maintaining its computer infrastructure adequately, according to a new report by the Treasury Inspector General for Tax Administration (TIGTA), a part of the Department of the Treasury that is tasked with overseeing the nation's tax agency.

According to TIGTA, computer software is typically protected by federal copyright law, which requires users of software programs to have a license authorizing such use. Software licenses are legal rights to use software in accordance with terms and conditions specified by the software copyright owner.

The IRS runs approximately 200 different software products on its mainframe computer systems, and TIGTA reviewed whether the IRS is adequately managing mainframe software licenses.

The group found that the IRS is not adhering to Federal requirements and recommended industry best practices.  Specifically, the IRS does not have policies, procedures, and requirements for mainframe software license management and does not have a centralized, enterprise-wide organizational structure for managing mainframe software licenses.

The inadequate mainframe software license management has resulted in an estimated waste of $11.6 million and over-utilization of $1.5 million in license and software subscription support fees.

“Efficient and cost-effective management of the IRS’s software assets is crucial to ensuring that information technology services continue to support the IRS’s business operations and help it to provide efficient services to taxpayers,” said J. Russell George, Treasury Inspector General for Tax Administration.

TIGTA made seven recommendations to the IRS to improve management of its mainframe software licenses.  The recommendations included developing policies, developing an enterprisewide organizational structure to manage mainframe software assets and licenses, and developing a software license inventory and maintaining it with a specialized tool.  IRS management agreed with all seven recommendations with slight modifications to three of them.